Outraged Coventry and Birmingham councillors are demanding the Football Association pay them around #1 million costs for preparing bids for the new national football stadium.

Outraged Coventry and Birmingham councillors are demanding the Football Association pay them around #1 million costs for preparing bids for the new national football stadium.

They are furious at a revelation that the FA had an agreement all along with Sport England that a refurbished Wembley stadium could be a "fall-back" option if the new Wembley project faltered.

A House of Commons select committee heard on Tuesday there was an agreement in the contract in which Sport England gave the FA a #120 million grant to buy the Wembley land.

That agreement said if the project fell through Wembley could be refurbished and host the FA Cup and home internationals for 20 years as a way of paying off the debt to Sport England.

Coventry City Council cabinet member for arts and leisure Cllr Ann Lucas (Lab, Holbrook) said she was "speechless" and "incandescent with rage" after learning about the agreement only yesterday.

Coventry and Birmingham both prepared rival bids for the national stadium.

Birmingham spent #500,000 of its own money and got in up to #500,000 worth of free expert advice from outside organisations. Coventry spent #120,000.

Angry letters were fired off yesterday to the FA from Coventry's deputy leader, Cllr John Mutton (Lab, Binley and Willenhall), and Paul Spooner, project director of Birmingham's bid, asking for compensation.

FA chief executive Adam Crozier has already replied to Birmingham, denying it had ever been misled, and saying all the "key stakeholders" were aware of the "staging agreement" between the FA and Sport England.

Letters from the FA to Birmingham's team also reveal that as early as July last year - when Coventry City Council was still spending money - the FA was not contemplating Coventry as a serious option.

FA chief executive Adam Crozier, writing to Sir Michael Lyons, chief executive of Birmingham City Council last July, said there were three options - a 90,000-seat Wembley, a smaller design at Wembley and a similar sized one at Birmingham. There was no mention of a refurbished Wembley.

Cllr Lucas said: "It's absolutely appalling."

She added that it would have been simpler if they had been sent a letter saying: "Thank you Coventry, thank you Birmingham but don't bother because it isn't going to happen. We've already got an agree-ment which basically says if the new Wembley doesn't go ahead, we'll refurbish the old Wembley and in the meantime play in the Millennium Stadium in Cardiff".

A spokesman for the group that prepared Birmingham's rival bid - to build the stadium at the National Exhibition Centre - said last night: "We've spent public money and in our bid got professional expertise free of charge from the private sector and we want the FA to recognise that and consider refunding part or all of it.''